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Title: Contract of Employment
Description: I am studying Law, Accounting and Finance at UKC. These notes cover a topic in Business Law about 'Contract of Employment'. They have been based on Chapter 23 in Lee Roach's book Card and James' Business Law. They cover employment tribunals, the differences between employees, workers, and the self-employed, employment contracts and their terms relating to both employee and employers.
Description: I am studying Law, Accounting and Finance at UKC. These notes cover a topic in Business Law about 'Contract of Employment'. They have been based on Chapter 23 in Lee Roach's book Card and James' Business Law. They cover employment tribunals, the differences between employees, workers, and the self-employed, employment contracts and their terms relating to both employee and employers.
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Dear User,
These notes have been created with the primary cause of helping
you understand Employment Law
...
Some phrases and quotes have been directly
copied out of the book, and I acknowledge that
...
I fully acknowledge that all these notes have
been either paraphrased or fully/partially taken from the book by Lee
Roach
...
■ They had to use products and were charged for them
...
■ The court had to determine if the terms of the written agreement
were truly representing what was agreed, and decided that it did
not and so the claimants were held to be employees
Distinguishing Between Employees and Independent Contractors
● Employment Rights Act 1996 s 230 defines an employee as someone who
entered to work under a contract of employment
○ Contract of service, whether expressed or implied, and if its express in
writing or oral
○ An employee who works under a
contract of service
:
■ More security as everything has been set out
○ as opposed to independent contractor who operates under a
contract for
services
■ Independence: not completely as people might demand it
■ Can make more money
‘Control’ test
● Example Case: Yewens v Noakes: hopmerchant (makes beer) owned all these
houses
...
Paid a fixed fee to do this
...
Was he a servant or
selfemployed? Court found he was self employed
...
g
...
Also, risk
was placed mostly on drivers, not the company
...
○ The employee should be subject to control of employer
Atypical Workers
● Workers who work outside normal working hours of many employees and who
likely work from home
Homeworkers
● Mostly in clothing industry
● Now ‘teleworkers’
● Homeworkers have specific rights under statute
● To have more general rights, they must be classified as employees
● Case Example:
○ Nethermore Ltd v Taverna:
■ Claimant was homeworker sewing pockets onto trousers
■ She was dismissed and initiated an unfair dismissal claim
■ Defendant alleged she was not an employee
■ Court focused on mutuality of obligations between parties as shown
during the number of years
...
Agency Workers
● Before, there was limited statutory protection for agency workers but then they
passed Agency Worker Directive, and its implementation by Agency Workers
Regulations 2010
● Need to have worked 12 weeks to qualify and be protected under Directive
● Agency workers covered by the Regulations will be entitled to same rights as
those recruited by hirer
● However, sometimes Regulations do not apply when employment tribunal/court
will need to determine whether agency workers are employees
● No single test or factor that could determine this
...
She pleaded for unfair dismissal
...
● Case Example: James v London Borough
○ James (the claimant) had worked for enduser for three years, having
been assigned to it by two recruitment agencies
...
■ The Tribunal determines what must be in it
■ The Tribunal awards a minimum of 2 weeks pay, unless failure to
receive the statement connected to unfair dismissal or
discrimination which makes it 4 weeks pay
● The copy must include:
○ Names of employer and employee
○ Date on which employment began
○ Employee’s rate of remuneration and frequency of payment
○ Employee’s hours of work
○ Information concerning holiday entitlements and pay, sick pay, and
pension
○ Notice requirements
○ Job title and/or description
○ Length of employment if applicable
○ Place of work and places he is permitted to work, and address of
employer
○ Where employee is required to work outside the UK for a period more than
a month, the full period, and any additional payment
○ Collective agreements that directly affect the terms and conditions of
employment
■ Collective agreements are agreements (usually relating to working
conditions, holiday entitlements, etc) made between employers and
trade unions
■ Not legally enforceable unless they have it in writing
■ UNLESS parties expressly incorporate them in the contract: then
they are express terms and must be provided within the two months
■ They can be implied into the contract; this cannot be proven by just
being part of a union or association; if they can prove that during
bargaining they meant for it to be part of contract, it is implied; if
they can prove that its a custom for the employer, it is implied
Implied Terms Relating to Conduct of Employer
● Terms can be implied by:
○ courts, based on intentions of parties
○ by courts as a matter of law
○ by statute
○ by custom and practice
Duty to provide work
● No general duty to provide work, except in specific circumstances:
○ Where employee is paid by commission (if he doesn’t provide work, he
would have no money)
○ Where the job needs practice or else there’s a loss of skills
○ Where the lack of a job would lead to a loss of publicity or reputation like
actresses
Duty to pay the employee
● IN Beveridge v KLM Ltd, the employee after a long illness period declared that
she was fit to come back to work, but he refused until she was cleared by his
own doctor
...
● EAT said in absence of contractual provision, employer must still pay when
employees are offering to work
● This does not apply if it is due to circumstances outside control of employer like
the place closing due to natural disaster or strike
Duty to indemnify the employee
● Employer is under a duty to indemnify employee for any traveling expenses and
perhaps costs incurred in defending a legal action
● However, duty does not apply if employee is incurring costs defending his own
negligence
Duty of mutual trust, confidence, and respect
● Employment relationship is based on mutual trust and confidence
● Employers must act in a way that does not endanger this relationship
● For example, making an employee relocate or calling her names
● Usually most cases are constructive dismissal cases, which means they were
caused because of negative actions by employer
● Case Example: Malik v Bank of Credit and Commerce International SA: BCCI
was involved in fraud and criminal activity
...
They said this was a
breach of duty of mutual trust and confidence and succeeded
...
Duty to take reasonable care of employees’ health and safety
● Employers are under both a common law and statutory duty to take care of
health and safety of their employees
● This implied term can override any express terms (if an employee’s contract
requires him to work too many hours that are damaging)
Duty to deal with grievances
● Employers must put measures that deal effectively and efficiently with grievances
of their employees
● Case Example: In WA Goold v McConnel, change in sales methods made
commission less
...
EAT said employer
had breached an implied term to deal with grievances
...
g
...
● However, specific duties may exist
...
It may exist way after employee’s
contract has ended
...
g
...
Belief in danger must be reasonable and personal
...
○ Instructions should not be related to activities outside scope of employee’s
contract
...
She could not be paid for her strike
duration because her actions disrupted her employer and breached this duty
...
○ Like employees making a profit because of his employment and not telling
the employer; it is a breach of duty and so employer can take back the
profit made
...
If
employee works for a competitor (or does anything that harms employer),
it usually is breach of duty
■ Example Case: Hivac Ltd v Park Royal Sci Instruments Ltd:
employees made hearing aids
...
This was breach and court granted injunction
making them unable to work for rival firm
...
● What about employers who want to stop employees from resigning and setting
up new firm or joining a competitor?
○ Employers can try one of two things:
■ Restrictive covenants:
● Contract requiring party to refrain from something like
competition with other party
...
■ Garden leave clauses:
● Impose long notice periods on employees, where they get
full pay, but cannot work for anyone
● Court can decide whether to enforce it by an injunction or not
enforce it (if it is unreasonable like employee leaving not
actually harming business interests of the employer)
Duty to use Reasonable Skill and Care
● There is an ‘implied warranty that he is of skill reasonably competent to task he
undertakes’
● Breach of this means employer can dismiss employee and claim damages for
loss
● Example Case: Janata Bank v Ahmed: bank manager gave large amounts to
people without checking if they were credit worthy
...
● Why is this duty so important?
○ Because when employee commits tort that causes a loss to a third party
and the third party starts a case against employer because of vicarious
liability, employer can not only get a contribution from the employee under
Civil Liability Act 1978, but he may also be able to claim damages for
breach of the implied term of exercising reasonable skill and care
Duty of Confidentiality
● Some people regard it as duty of fidelity
● Issues of confidentiality: Does it constitute as a breach of duty if:
○ An employee passes on trade secrets belonging to his employer for a
payment or job offer? YES
○ An employee leaves the job and opens up his new business using the
skills and knowledge he gained in the previous job? NO
○ An employee who took customer data from previous employer? YES, as
was the case Roger Bullivant Ltd v Ellis
■ Courts have made a clear distinction between confidential info and
just general skills they have learned
○ An employee wishing to disclose unlawful acts of employer? Employee not
legally obliged to disclose such info
...
They can disclose a
number of things, such as criminal offenses, not complying with safety or
legal obligations
...
■ Fun Note: They learned their lesson because of the huge
corporation scandals like BCCI
Title: Contract of Employment
Description: I am studying Law, Accounting and Finance at UKC. These notes cover a topic in Business Law about 'Contract of Employment'. They have been based on Chapter 23 in Lee Roach's book Card and James' Business Law. They cover employment tribunals, the differences between employees, workers, and the self-employed, employment contracts and their terms relating to both employee and employers.
Description: I am studying Law, Accounting and Finance at UKC. These notes cover a topic in Business Law about 'Contract of Employment'. They have been based on Chapter 23 in Lee Roach's book Card and James' Business Law. They cover employment tribunals, the differences between employees, workers, and the self-employed, employment contracts and their terms relating to both employee and employers.